A 110% rise in the share price of industrial goods manufacturer Jiangsu Guomao Reducer after its IPO this month has lifted its founder into the ranks of the world’s billionaires.
Guomao Chairman Xu Guozhong, together with wife and two children, share 71% of the listed company after IPO, a stake worth 7.2 billion yuan, or $1 billion, today. Xu’s wife doesn’t hold a position in the business.
Xu was a farmer, crab hawker, hotel owner and textile manufacturer before shifting his business in 1993 to industrial reducers.
Xu's ascent follows China's minting of another new billionaire in recent days. Wu Junbao, chairman of China East Education, crossed that threshold after the company went public at the Hong Kong Stock Exchange this month. Wu holds 34% of China East Education, a stake worth just over $1 billion on Tuesday. Adding in Wu’s stake in Hong Kong-listed China Xinhua Education, he was worth $1.4 billion that day.
Guomao sold 84.4 million shares at 10.35 yuan per share this month, raising 873 million yuan, or $126 million, mainly to increase its manufacturing capacity.
Guomao’s revenue and net profit in 2018 was 1.8 billion yuan and 220 million yuan, or $122.6 million and $32 million, up 19% and 63%.
Xu’s son Xu Bin is a Guomao director and general manager.
China is home to the world's second-largest number of billionaires after the United States.